October 12, 2020 BARRON’S 15
AMC’s net debt-to-Ebitda (earnings be-
fore interest, taxes, depreciation, and amor-
tization) ratio was about 15 at the end of last
year, and is nearly 500 now, according to
FactSet. “We have substantially increased
our cash reserves and improved our liquid-
ity in other ways to extend our financial
runway into 2021,” CEO Adam Aron said in
August. But even though AMC is open, sales
are weak, S&P notes. “We expect the com-
pany’s cash burn will remain elevated and
could accelerate further over the remainder
of 2020 unless there is a significant im-
provement in attendance levels relative
to the September box office.”
IMAX (IMAX), whose giant-screen
format makes it popular for action movies,
recently told B. Riley’s Wold that it expects
positive cash flow in the fourth quarter,
after a monthly cash-burn rate of $9 million
under Covid-19 lockdowns.
IMAX said on Oct. 8 that it will furlough
about 150 employees for at least two
months beginning on Oct. 26. The move
will allow the company to “temporarily
retrench, conserve resources, and adjust
its operations” in response to the lack of
Hollywood releases and theater closures.
The furloughs will not affect operations
in China and Japan. IMAX ticket presales
in China, where it has half of its 1,500 the-
aters, are running 10% above last year’s
levels for National Holiday week, which
was Oct. 1-8. China “has emerged as an
engine of stability for IMAX,” said its
CEO Rich Gelfond in a statement.
Film studios keep pushing back the pre-
mieres of blockbusters, including Wonder
Woman 1984 , delayed by Warner Bros., and
Candyman , which Universal has pushed to
next year. MGM again moved its James Bond
movie, No Time to Die , to next April. The
canary in the coal mine was Tenet , Christo-
pher Nolan’s sci-fi thriller that opened on
Labor Day weekend and was supposed to be
a gate crusher. Instead it has attracted a
tepid $300 million or so in box office sales,
most of that outside the U.S.
“Even with no competition and every
open theater going full throttle, the num-
bers were underwhelming,” Greenfield
said. “Consumers are just not ready.”
But one promising sign is that the re-
leases are being postponed, not moved to a
streaming platform, as Disney did with its
live action Mulan last month. Studios make
more money premiering big titles in tradi-
tional theaters, says David A. Gross, who
runs Franchise Entertainment Research.
“The theatrical business is broken right
now,” Gross tells Barron’s. “Netflix and
Disney+ are having their moment, but
when you really tear into the numbers,
no one is concluding we should run the
theater movies to the small screen.”B
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